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Sterling slides as BOE rams home easing message

Frank van den Bergh | E+ | Getty Images

The British pound fell for the fifth day in a row on Tuesday and was the largest major currency mover after a Bank of England policymaker said that more quantitative easing was probably necessary if the U.K.'s economic decline worsens.

"Bank rate can be cut further, closer to zero, and quantitative easing can be stepped up," Ian McCafferty, an external member of the Monetary Policy Committee, wrote in an op-ed piece for the Times.

"The pound is the big story today," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York. "Everything else is pretty flat within yesterday's trading ranges."

How's how major currencies are looking right now: Strategist

The Bank of England last week cut interest rates to next to nothing and unleashed billions of pounds of stimulus to cushion the economic shock from Britain's vote to leave the European Union.

The pound last fell 0.29 percent on Tuesday to $1.30, after hitting $1.2902 - its lowest since July 11.

Trading volumes this week are expected to be relatively light, with many traders and investors on summer vacations.

Friday's retail sales report for July will be the next major U.S. economic focus.

A speech by U.S. Federal Reserve Chair Janet Yellen at the central bank's symposium in Jackson Hole, Wyoming, on Aug. 26 is also anticipated for any new indications of when an interest rate increase may be likely.

Stronger-than-expected July jobs data released on Friday has raised expectations that the U.S. central bank will raise rates again this year.

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Most economists and investors see a U.S. rate hike as likely in December and believe the Fed will be hesitant to act before the U.S. presidential election in November.

The dollar index against a basket of currencies was down 0.24 percent at 96.17. The greenback was 0.47 percent weaker against the at 101.88.

The Reserve Bank of New Zealand is expected to be the next central bank to ease conditions, by cutting rates on Thursday by 25 basis points to 2.00 percent.

The kiwi gained 0.06 percent against the U.S. dollar to $0.72.